01Q2020 Unaudited financial information Investor Relations - - PowerPoint PPT Presentation

Investor Relations

Consolidated Results 01Q2020

Unaudited financial information

13/05/2020

2

DISCLAIMER

• The financial statements have been prepared on the basis of the International Financial Reporting Standards (IFRS) as adopted in the European Union in

accordance with Regulation (EC) No. 1606/2002 of the European Council and of the Parliament of July 19 and provisions of Decree-Law No. 35/2005 of

• February17. The financial information reported is unaudited.
• The financial metrics in this presentation refer to March 31, 2020, unless otherwise stated. These may be estimates subject to revision. Solvency ratios

include net income for the period.

• The first months of 2020 have been marked by the COVID-19 pandemic. As a consequence of the spread of the disease, with confirmed cases in more than

200 countries and territories, drastic measures have been taken to contain it, including the restrictions on mobility of the population, the closure of national borders and conditioning in a wide range of economic activities. Consequently, there is a strong deceleration in economic activity worldwide, anticipating a scenario of a global recession, with a high uncertainty regarding its depth and duration. Naturally, although still uncertain, impacts are expected on the Group's activity and its ability to achieve its economic and financial goals. The degree of which will depend on multiple factors, such as the depth of the economic crisis, its duration, the economic sectors that will be most affected, the nature and impact of the monetary and fiscal policy measures that the various governments and economic blocs will adopt, namely the European Union. In light of these uncertainties, and based on the information available at this time, it is not possible to reliably estimate the financial effects of this pandemic, including the valuation of financial and non-financial assets and the measurement of expected losses in the loan portfolio that will be prospectively recorded

• This document is intended for general information only and does not constitute investment recommendation or professional guidance and may not be

construed as such.

3

Agenda 1 2 3 4 5 6

Highlights Business Activity Results Balance Sheet Asset Quality Liquidity Capital Summary

7 8

4

Highlights

5

First quarter 2020 activity slight impacted by the COVID-19 pandemic

Highlights

Consolidated net income reaches €86 M (-32% over 1Q 2020) resulting in a ROE of 4.5% while domestic core operating income remains stable. 2020 regulatory costs fully accounted for in the 1st quarter In the first quarter, and in anticipation of the expected effects of the economic crisis, there was an additional charge of credit impairments and provisions for bank guarantees of €60 M Fully loaded CET 1 ratio reaches 16.6%, Tier 1 17.8% and Total ratio 19.2%, above the Portuguese and European average, evidence of CGD’s robust and adequate capital position Significant growth (+2.1%) in Portugal in corporate loans (excluding construction and real estate) and in new mortgage loans (+13%) Continued improvement in asset quality: NPL ratio net of impairments reaches 0.7% vs European average(1) of 1.5%. Reduction of NPL ratio to 4.5% and increased coverage of 84.3% CGD answered the pandemic circumstances with the availability of a moratorium and specific COVID-19 credit lines for both individuals and corporates and maintained its operational capacity Following on the ECB's recommendation, CGD will propose the non-distribution of 2019 dividends, incorporating the net result into free reserves

(1) EBA Risk Dashboard – December 2019

6

4.5% > 9% 2020-03 Execution Target 2020

2020 Management Targets < 43% 2020 Management Targets < 5% 2020 Management Targets > 9% 2020 Management Targets > 14%

49% < 43% 2020-03 Execution Target 2020 16.6% 2020-03 Execution Target 2020 > 14% 4.5% < 7% 2020-03 Execution Target 2020

Execution of the first 3M 2020 starts the conclusion of the Strategic Plan

Highlights

(1) Current activity ROE = (net income + non-recurring costs + non-controlling interests) / Shareholders ' equity (average of 13 monthly observations, annualized; (2) Domestic activity.

Return on Equity (ROE) Recurrent Cost-to-Income NPL Ratio CET1 Fully loaded Strategic Plan Targets

(2) (1) (1) (2)

7

99% of the 551 branches and corporate offices remained open during the State of Emergency, returning to 100% at the end of April (1) Operational response (1)

Highlights

6.6 thousand employees working at 100%

100%

• f branches
• pen

100%

• f corporate
• ffices in
• peration

55% in teleworking

(> 4,000 remote accesses)

~ 20% in retail

network

~ 80% in head

• ffice

CGD has demonstrated its capacity to handle this crisis, both in terms of protecting its employees and customers, and by assuring the continuity of its

• perations across all business lines

>3,600

automatic equipment

Market leader

4.5 millions

• f cards issued

Market leader

Electronic payments (1)

(1) In Portugal

8

Capacity to adapt and quickly respond to Covid-19 pandemic

Destaques

Economic and Social support

Caixa Geral de Depósitos (CGD) anticipated €20 million in payments to its Small and Medium Enterprises (SMEs) suppliers, to mitigate cash flow difficulties generated by the impact of Covid-19

CGD provided more than €1 million to support social projects, such as:

• Financial contribution to Portugal's contribution to the

international fund to support the fight against the pandemic

• Donation of 100 ventilators to the National Health Service

through the Portuguese Banking Association

• The Portuguese Red Cross Fund to finance health

projects and humanitarian support

• SOS – Coronavirus joint initiative of the Portuguese

Business Association (AEP) and the Medical Association

Solidary account opened: “SOS CORONAVIRUS” (IBAN PT50 0035 0651 0054 1498 2306 7 Description: Donation SOS-Coronavirus Beneficiary: AEP & Medical Association)

9

2020 Outlook

Highlights

• Macroeconomic scenarios still uncertain and volatile, as can be seen from official projections:
• Authorities announced unprecedented measures to support economic activity and mitigate the effects of the

pandemic crisis, CGD is an active part in their implementation.

• There will be a significant impact on credit impairments, which cannot be reliably estimated with the information

available as of this date.

• Caixa's business activity will naturally be affected, with an expected reduction in commission income and with

net interest income projected to behave as estimated.

• Therefore, it is of particular importance to meet current plans to improve efficiency and reduce operating costs.

(1) Bank of Portugal (BoP) - March 2020 Economic Bulletin *AS - Adverse Scenario; International Monetary Fund (IMF) - World Economic Outlook, April 2020; European Commission (EC) - Spring economic forecasts, May 2020

IMF 2020-04 EC 2020-05 BoP AS* IMF 2020-04 EC 2020-05 BoP AS* Gross Domestic Product (change,%)

• 8.0
• 6.8
• 5.7

5.0 5.8 1.4 Unemployment rate (active population, %) 13.9 9.7 11.7 8.7 7.4 10.7 PROJECTIONS FOR THE PORTUGUESE ECONOMY (1)

2020 2021

10

CGD is now better prepared to face the potential impacts of an economic crisis compared to 2009 (individual balance sheet 2019 vs 2009)

Highlights

• Financial assets eligible for ECB represent 32% of assets (6% in 2009)
• 71% transformation ratio (121% in 2009)
• Wholesale debt 2.5 bn (26 bn in 2009)
• Customer deposits finance 74% of assets (51% in 2009)

High levels of liquidity

(1)

• Sovereign debt represents 85% of financial assets (6% in 2009)
• Exposure to the stock market represents less than 1% (30% in 2009)
• 46% of financial assets in the portfolio to maturity (all financial assets with

exposure to market volatility in 2009)

• Illiquid assets represent less than 5% of financial assets (25% in 2009)

Lower market risk

• Mortgage credit represents 58% of the credit stock (50% in 2009), with

the lowest average LTV

• More diversified exposure (Construction and real estate represented 32%
• f loans to companies in 2009)
• Low exposure to leveraged operations, collateralized operations with

shares and significant exposures (between 2009 and 2016 two thirds of credit impairments resulted from this type of exposure)

Lower credit risk

• Equity represents 9.6% of total assets (5.5% in 2009)
• CET1 of 16.9% (8.3% in 2009)
• Capital total de 19.5% (12.6% in 2009)

Adequate capital position

• Simplified and more efficient structure
• Cost-to-Income 47% (60% in 2009)

Increased operational efficiency

11

Sustainability

Highlights

CGD anticipated the Caixa Social 2021 Awards with the objective of promoting non-profit initiatives, whose activity is allowed to combat, control, prevent and respond to the health, social and economic effects of the COVID-19 pandemic

Caixa Social 2020 Awards

CGD distinguished 18 projects from social institutions across the country that will make a difference in improving the living conditions of thousands of people

Lisbon Green Capital 2020 European Commitment

CGD has joined the Lisbon Green Capital 2020 European Commitment in partnership with the city of Lisbon in meeting the environmental goals, signing and committing to a set of measures and initiatives in the environmental field

Response to the impact of COVID-19 Carbon Disclosure Project (CDP)

CGD achieved leader status (A-) on the 2019 Climate Change Questionnaire of the Carbon Disclosure Project, ranking above the sector average (C)

Caixa Mais Mundo Awards

In March, CGD distinguished with an individual prize of €1.500 the 100 best national students from the Higher and Professional Academic Institutions, partners of CGD

Materiality analysis

Based on a process of surveying the main expectations of its stakeholders, CGD developed a review of its material themes in order to have a holistic view

• f the relevant issues in environmental,

social and governance matters

12

Business Activity

13

Leadership and Distinctions

Business Activity Leader in main client and product segments Market Shares

February 2020

25.3% 29.1% 52.2% 18.1% 19.6% 23.6% 25.9% 33.0% 24.3% 26.2% 39.3% 45.7% 27.6%

Customer deposits Individuals deposits Emigrant deposits Loans and adv. to customers Individuals loans Mortgage loans General government loans Unit trust Investment funds Financial insurance* Retirement savings plans* Wealth management Minimum service accounts* Debit cards

Prizes and distinctions

Best Global and Bond Fund Manager in Portugal 2020

Morningstar

Caixa Geral de Depósitos

Caixa Gestão de Ativos

* Dec-19

Sustainable Finance 2020 Award

Euronext Lisbon

Best Bank 2019 in Portugal

EMEA Finance Reputation Knowledge Centre

Brands Reputation Portugal 2020 Awards Most Reputed Brand 2020 Banking

Marktest Reputation Index

14

Support for households and corporates - COVID 19

Business activity Individuals and households Corporate business

• Mortgage loan protection for permanent own residence (1)

Capital or capital and interest moratorium, until 30 September 2020

• Mortgage and Consumer Credit protection (1)

Capital or capital and interest moratorium, until 30 September 2020 and for 12 months, respectively, with an expiration date equal to the grace period

• Unlimited SEPA and MB Way transfers

In digital channels for Caixa S and M Account holders (Multiproduct Solution)

• No fees payable for the first year or during the crisis period

Debit card for customers who do not have this means of payment in any account; (ii) account maintenance, for all clients with a pension of up to 1.5x the national minimum wage and young people up to the age of 26

• Use of app for easy access to Caixa

Subscription of Caixadirecta (CGD home banking) 100% digital through the Caixadirecta APP, with the possibility of immediately joining the debit card

• COVID 19 Capitalizar 2018 (capitalisation) – line of credit

Government line with 80% Mutual Guarantee (GM) and an amount of €400 M, comprehensive answer in sectorial terms, SOLD OUT

• COVID 19 Economic support line of credit

Government line with 80% GM (90% for micro and small companies) and an amount of €6,200 M distributed over 4 specific sub-lines:

• COVID 19 - Support for Economic Activity – €4,500 M SOLD OUT
• COVID 19 - Support to Tourism Companies - €900 M
• COVID 19 - Support to Catering Companies and similar - €600 M
• COVID 19 - Support to Travel Agencies, Tourist Entertainment, Event

Organizers and similar - €200 M SOLD OUT

• Flexible solutions for the Caixa Invest Inovação (investment and

innovation) line of credit For companies that needed to adapt to teleworking or to implement home delivery

• Small traders exempted from monthly POS equipment charges

Return by May 31 of the monthly fee for all POS ​with a invoicing of less than €7,500 per month

• Possibility of rescheduling operations
• Possibility of implementing a state-sponsored moratorium

(1) Individuals customers under eligible conditions

15

CGD promotes moratoriums and support lines for households and companies

Business activity Requests received by May 11, 2020

(1) Portuguese Banking Association

(EUR Million)

No Operations Amount Public guarantees

Applications 7,375 1,574 Already approved 2,440 734

Other credit lines

Credit granted between Jan 1 and Apr 30 1,900 Pre-approved credit 2,900 Current accounts available 4,700

CREDIT LINES (COMPANIES) CREDIT MORATORIES Requests Received No Customers No Oper Amount No Oper Amount Individuals 38,238 33,883 2,939 25,993 2,129

Legal Moratorium 1,023 APB1 Moratorium 1,080 CGD Moratorium 26

Companies 15,772 13,231 2,839 11,853 2,608

Legal Moratorium 2,542 CGD Moratorium 66

Total 54,010 47,114 5,778 37,846 4,737 Eligible Requests Approved

16

Business Activity

Number of Active Customers (M)

Including more than

153,000

Portuguese Companies (2)

(1) BrandScore Study – client recognition Q12020; (2) Customers with active Caixadirecta contract;

68%

jan-20 fev-20 mar-20 abr-20 Percentage of customer operations performed using digital channels

>1 million

Customers Accesses in one day

COVID 53%

1,7 1,9 2,0

2,1

1T17 1T18 1T19 1T20

million customers globally

Digital Banking: “Best Digital Bank”(1) with enhanced use in the Covid period

+ than requests Digital: Capacity to adapt and rapidly respond to COVID-19 pandemic

(1) Since launch (2) Compared to previous month

Number of customers that started using automatic telephone channel Number contacts received

100% online

For moratoria requests

Caixadirecta adherence 100% digital

via app with biometric identity validation

55%

(2)

34%

(2)

2,100

customers In the first 15 days

35,000

Operations via 100% Digital Assistant

Caixadirecta App to record moratoria requests and contract unblocking

+ de 9,000

Unblockings in the first month

+ 135,000

Unique users (+55k last month)

(1)

1st bank in Portugal 100% teleworking

at Contact Center

1st Bank Forms

Business Activity

Digital channels and Remote Management: greater use generates increased business

INDIVIDUALS COMPANIES

CONSUMER LOANS MUTUAL FUNDS

(1)

200% 77%(1)

FACTORING FX BUSINESS

(1)

10%

(1)

15%

162 176 273 437 502 2016 2017 2018 2019 2020(1T) Number of remote management customers (thousands)

CAIXADIRECTA REMOTE MANAGEMENT

(1) Year on year variation;

+15%

Increase in Operating Income

(1)

60%

Weight in Savings constituted Q12020

84%

Weight in Factoring contracted Q12020

Business Activity

Innovation: Caixa continues to put digital at the service of its customers

(1) Year on year variation; (2) Compared to last quarter 2019 (3) rating App store and Google play .

Can aggregate

REVOLUT

40%

1st national app

Transfers from any other bank

+39% (2)

Downloads

4.5

★★★★★

~ 90.000k comments

(3)

>1 M

downloads

72,000

downloads Register in app via

Mobile Digital Key

>502,000

Unique users per day

• f clients have

aggregated accounts from other banks

Caixa Digital Assistant

1st transactional digital assistant in Portugal able to unblock access and request moratoria

100% Ddigital Caixadirecta Adherence

1st bank with in app adherence via biometric identity validation and proof of life

Business Activity

20

Results

21

6.6% 4.5% 2019-03 2020-03

• 171
• 1,860

52 496 776 86

2015 2016 2017 2018 2019 2020-03

Consolidated Net Income

M€

First quarter 2020 with profitability affected by the increase in provisions and impairments

Results ROE

2.0 p.p.

22

M€

Quarterly Net Income with a year on year reduction

Results Quarterly Net Income 2017 2018 Net Income 126 86 2019-03 2020-03 2019

32%

(*) (*) (*) (*) Including regulatory costs for the year (**) Excluding the extraordinary impacts of the sale of international assets, or in the process of being sold

2020

• 39
• 11

3 99 68 126 175 126 126 291 223 135 86

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

(*)

156

(**)

199

(**)

150

(**)

23

M€

Resilient domestic Net Core Operating Income before Impairments

Results Quarterly Net Core Operating Income before Impairments (1)

0.6%

2018 2019 Net Core Recurrent Operating Income before Impairments (1) (2) 2020 (Domestic Activity) (Domestic Activity) 57 154 136 103 69 161 129 104 64

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

125 125

2019-03 2020-03

(*) Net core operating before Impairments = Net interest income incl. inc. from eq. invest. +Net Fees and Commissions – Operating costs (**) Excluding non recurrent cots

24

172 175 178 191 183 184 179 185 172 172 166 169 157

300 306 303 332 291 292 287 313 283 281 287 281 263 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

CGD Portugal Consolidated M€

Net Interest Income impacted by loan portfolio and interest rate level

Results Quarterly Net Interest Income 2017 2018

Change Year on Year 1Q2020 vs 1Q2019

2019

8.6% 7.3%

2020

25

126 121 128 136 116 109111114 106 113115 132 115 127124 114 119 125 130128 123

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

Net Fees and Commissions grow over the same quarter of 2019

M€

Net Fees and Commissions

2018 2019 4.1% 2017 2015 2016 118 123 2019-03 2020-03

Results

2020

Change Year on Year 1Q2020 vs 1Q2019

26

35 29 37 43 14 15 11 16

Securities and Asset Management Bancassurance Cards, Payments and Other Credit & Off-Balance Sheet

97 103

Net Fees and Commissions grew in first quarter, supported by bancassurance and securities and asset management

M€

Net Fees and Commissions (Domestic Activity)

2019-03 2020-03

Results

+5 M€ +1 M€ +6 M€

• 6 M€

+22.1% +0.4%

27

M€ 2019-03 2020-03

Lower Operating Costs at consolidated level

Results Operating Costs

3% 10% 3% 4%

(*) Non recurrent costs (**) Excluding Non recurrent costs

133 129 219 210

56 61 56 61

189 190 64 58 22 23 275 271

(*) (*) (*) (*)

(**) (**)

28

Cost-to-Income (1)(2) Cost-to-Income

• f Domestic activity (2)

%

(1) Ratio defined by the Bank of Portugal Instruction 6/2018 [Operating Costs / (Total Operating Income + Income From Associated Companies)]; (2) Excluding non-recurrent costs; (3) Operating Costs / (Net Interest Income + Net Fees and Commissions);

Cost-to-Income stabilised, improvement in domestic activity

Results

52% 48% 49% 2018-03 2019-03 2020-03 58% 55% 55% 2018-03 2019-03 2020-03

Cost-to-Core Income (2)(3)

56% 48% 48% 2018-03 2019-03 2020-03

29

86 64 40 22 2019-03 2020-03

International Activity Domestic Activity

86 126

M€

Contributions to Consolidated Net Income

Results Contributions from International Activity

(*) Accounting treatment of the closure of the Spanish branch without impact on the consolidated result

(*)

Entities 2019-03 2020-03 (%)

Banco Nacional Ultramarino (Macao) 17 15

• 12%

Banco Comercial e de Investimentos (Mozambique) 8 6

• 27%

Banco Caixa Geral - Angola 2 4 143% France Branch 6 3

• 59%

Timor Branch 1 2 92% Banco Interatlântico (Cape Verde) 1 1 47% Other 6

• 1
• 115%

Other impacts

• 7

n.a. Total 40 22

• 45%

30

Balance Sheet

31

12% 29%

Corporates Individuals

14% 20% 24%

Corporates Individuals (Total) Individuals (Mortgage)

Customer Deposits – Portugal

February 2020 CGD

25%

Total

Loans and Adv. to Customers – Portugal

February 2020 CGD

18%

Total

Deposits from: Credit to:

%

Market Shares: CGD leader in Portugal

Balance Sheet

32

Total Customer Resources (Domestic Activity)

M€

Customer Deposits in Portugal increase in all segments

Balance Sheet Customer Deposits (Domestic Activity)

Corporate 8,141 Individual Customers 45,026 General Government and Institut. 2,710

2019-12

Corporate 8,702

Individual Customers

45,907

General Government and Institut.

2,953

2020-03 72,949 1,685

• 202
• 84
• 613

2 73,737

Resources 2019-12 Deposits Bancassurance Treasury Bonds Funds Bonds Resources 2020-03

33

Loans and Advances to Customers (Gross) (CGD Portugal)

Credit to customers in Portugal with more expressive growth in the corporate segment

Balance Sheet

13,710 13,849 2,767 2,795 23,652 23,558 771 785

Total 2020-03 40,987 44,303 Total

Corporates General Government Individual Customers Individual Customers and Others (Mortgage Loans) (Other Loans) Corporates General Government Individual Customers Individual Customers and Others (Mortgage Loans) (Other Loans)

2019-12

M€

2.1%

Gross loans to corporates

excluding construction and real estate sectors

(CGD Portugal)

+186 M€

Change 1Q 2020 vs 4Q 2019

8,833 9,019 2019-12 2020-03

34

Positive evolution in new Mortgage Loans but with signs of slowing down

Balance Sheet

M€

283 429 397 449 449 521 525 578 507

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

13% +58 M€

Change year on year 1Q 2020 vs 1Q 2019

2018 2019 2020

35

Asset Quality

36

Cost of Credit Risk

%

Reduced Cost of Credit Risk

Asset Quality 3,40% 0,13% 0,22%

• 0,09%

0,07% 2016 2017 2018 2019 2020-03 In anticipation of the expected effects of the economic crisis, in the first quarter, there was a charge in credit impairments and provisions for bank guarantees of 60 M€. Without it, the cost of credit risk would have remained at -0.09%.

37

97.6% 103.0% 119.1% 123.8%

62.5% 62.8% 80.0% 84.3%

NPE NPL

2019-03 2020-03 39.6% 35.0% 2019-03 2020-03 40.2% 39.1%

7.8% 4.5%

2019-03 2020-03

Gross Ratios Coverage by Impairments and Collateral

%

(1) NPE – Non Performing Exposure and NPL – Non Performing Loans – EBA definitions; (2) EBA Risk Dashboards – December 2019

NPE and NPL decreasing with higher coverage level. NPL > 90 days below 3%

Asset Quality

Impairments Collateral

(1) (1) (1)

NPE NPL

(1)

2.6%

NPL>90d

European Banks Average (2)

44.7%

4.9%

NPL>90d

6.1% 3.6%

2019-03 2020-03

38

10.6

• 2.2
• 1.8
• 2.6
• 1.3
• 0.05
• 0.09
• 0.06

+0,04 5.0 1.9 0.6

0.4

2.5 2.7

NPL 2016-12

Recoveries

NPL 2019-12 NPL 2020-03

Cures Sales Write-offs and Other Recoveries Cures Sales Write-offs and Other

(2) (1) NPL – Non Performing Loans – EBA definition. (2) NPL net of impairments.

NPL reduction continues in 2020, down 8.0 B€ (-76%) since December 2016. NPL ratio at 4.5%. Ratio net of impairments at 0.7%.

Asset Quality NPL evolution

% B€

(1)

15.8% 12.0% 8.5% 4.7% 4,5% 2016-12 2017-12 2018-12 2019-12 2020-03

1.1% 3.4% 8.1% 5.6% 0.7%

(2) (2) (2) (2) (2) (2) (2)

39

Domestic Activity Loan portfolio is changing and with a high level of collateral…

Asset Quality

%

Corporate Loans Exposure by Sector LTV LTV weighted average of the Housing Loan Portfolio of 60.28%

31% 12% 17% 20% 10% 5% <50% 50%-60% 60%-70% 70%-80% 80%-90% >90%

Loans and Advances to Customers Exposure by Sector

40

(2)

1st Quarter 2020 with no significant reclassifications at credit risk

Asset Quality CGD Group

M€

(2) (2) (2) (2) (2) (2) (2)

CGD Portugal

Assets Impairment Stage 1 35,577 116 Stage 2 3,380 359 Stage 3 2,118 1,392 2019-12 Assets Impairment Stage 1 35,615 213 Stage 2 3,487 325 Stage 3 2,052 1,369 2020-03 Assets Impairment Stage 1 43,501 170 Stage 2 4,374 415 Stage 3 2,779 1,623 2019-12 Assets Impairment Stage 1 43,949 246 Stage 2 4,374 379 Stage 3 2,728 1,637 2020-03

Loans and other exposures

41

Foreclosed Assets Coverage by Impairments

45% 46% 49% 2017-12 2019-03 2020-03

% M€

Foreclosed Assets (Real Estate) maintains decreasing trend and Coverage is reinforced

Asset Quality

1.025 719 539 2017-12 2019-03 2020-03

47.5%

Change 2017-12 vs 1Q2020

42

Liquidity

43

3.467 471 2017 2018 2019 2020-03 ECB Funding Assets in ECB Pool and Other Eligible Assets

M€

CGD with ample capacity to access funding

Liquidity

(*) Total value refers to BCG Spain, sold in October 2019 (*)

2,618 4,610 5,024 738

12,989

13,655 11,988 10,800 12,989 1,152 4,261 7,278 5,265

2017-12 2018-12 2019-12 2020-03

Eligible Unencumbered Assets not in ECB Pool Eligible Assets in ECB Pool

14,807 16,249 18,254 18,078

44

3,074 12,989 5,265 Total Maturity Asset Pool 18,254

Wholesale Debt maturity profile

M€

Asset pool fully covers wholesale debt maturities

Liquidity Total vs Eligible Assets in ECB Pool and Eligible Unencumbered Assets

1,047 141 1,750 500 506 134 2020 2021 2022 2023 2024 >2024

Cover Bonds Senior Pref Senior Non Pref Tier 2 AT1

(*) (*)

(*) Considering the exercise date of the Call

45

Customer Deposits

88%

Debt Securities and Subordinated Liabilities

3%

Other

8%

Central Banks and Credit Instit.

1% 76,931 M€ Liabilities Structure Loans-to-Deposits Ratio

Loans and Adv. to Customers (net) Customer Deposits M€ %

Stable funding structure based on retail funding

Liquidity

(1) Excluding non-current liabilities held for sale (1)

47,974 48,008 64,771 67,364

2019-12 2020-03 74% 71%

46

209% 235% 332% 392% 2017 2018 2019 2020-03

LCR (Liquidity Coverage Ratio)

% 139% 149% 156% 2017 2018 2019

NSFR (Net Stable Funding Ratio)

Robust and sustainable liquidity position

Liquidity

Regulatory requirement: 100%

47

Capital

48

1.92% 1.14% 1.92% 1.14% 2.56% 1.42% 2.25% 1.27% 1.27% 1.27% 2.50% 2.50% 2.50% 2.50% 0.75% 0.75% 0.75% 0.75% 8.0% 4.50% 4.50% 4.50% SREP Requirement Fully Implemented SREP Requirement Fully Implemented SREP Requirement Fully Implemented

9.02% 10.94% 13.50% 19.2% 17.8% 16.6% 13.50%

SREP 2020 Requirements and CGD Capital Ratios in 31 March 2020

%

Following the ECB's recommendation, it will be proposed not to distribute dividends from 2019

Capital CET 1 Tier 1 Total

CCB P2R Pillar 1

AT1 Tier 2

Tier 2 AT1

AT1

O-SII

• On April 8th, the ECB communicated that P2R of 2.25%, which initially should have been composed exclusively of CET 1, would now be covered

in 56.25% by CET 1, 18.75% by AT 1 instruments and 25% by Tier 2 instruments, as of March 2020;

• On May 8th, the Bank of Portugal informed that it had delayed by one year the O-SII phasing-in. The requirement for CGD in 2020 and 2021 will

be 0.75% and in 2022 and 2023 it will be 1.00%

SREP Requirement

49

Resilient Capital Ratios despite impacts on revaluation reserves caused by market volatility due to the pandemic

%

Capital Ratios Evolution (Fully Loaded) Capital

14.6% 16.9% 16.6% 2019-03 2019-12 2020-03

CET 1

16.9% 19.5% 19.2% 2019-03 2019-12 2020-03

Total

50

Situation caused by the pandemic, attenuates expectations of the rating increase achieved with the successful implementation of the Strategic Plan (5 increases since 2017)

Highlights

DBRS Morningstar Moody’s

BBB / R-2 (high) Ba1 / NP

Jun19: Upgrade of long and short term debt ratings and Covered Bonds ratings Oct19: Upgrade of long and short term deposits ratings to BBB (high) and R-1 (Low) with outlook stable Jul19: Long-term senior debt rating affirmed at Ba1 Outlook revised from negative to stable Upgrade of long and short term deposits ratings

Fitch Ratings

BB+ / B

Oct19: Upgrade of long term Issuer Default Rating (IDR) to BB+ with outlook stable and Viability Rating (VR) to bb+ Apr20: Maintained IDR at BB +, reduced Outlook to negative and attributes BBB- for the 1st time to deposits

(+1 notch) (+3 notches) (+2 notches)

BB- BB BB+

Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19

Fitch Long Term Ratings

BBB low BBB

Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19

DBRS Long Term Ratings

B1 Ba3 Ba1

Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19

Moody's Long Term Ratings

51

8.2% 7.7% 8.7% 2017 2018 2019

Risk Weighted Assets (RWA) density, Texas and Leverage Ratios

Capital

53% 52% 52% 2019-03 2019-12 2020-03

Densidade de RWAs Texas Ratio

(1)

47% 31% 29% 2019-03 2019-12 2020-03

(1) Texas Ratio = Non Performing Exposure EBA / (Impairments + Tangible Equity)

%

Leverage Ratio

RWA fully implemented (2020-03): 44.5 B€

52

2.0 2.3 2.4 2018 2019 2020-03 16.6% 9.02% CET 1 2020-03 Requirement 2020 16.6% 10.94% CET 1 2020-03 Requirement 2020 + Gaps Tier 1 and Tier 2

ADI

(Available Distributable Items)

MDA

(Maximum Distributable Amounts)

33 x Annual Cost AT1 (1) 37 x Annual Cost AT1 (1) MDA Buffer: 5.7% 2.5 B€ MDA Buffer: 7.6% 3.4 B€

(2)

% B€

(1) 10.75% coupon for current 500 M€ AT1 issuance; (2) Considering fulfilment of buckets of 1.92% in AT1 and 2.56% in T2.

Available Distributable Items (ADI) and Maximum Distributable Amount (MDA)

Capital

44 x Annual Cost AT1 (1)

(2)

53

Summary

54

Activity in the first quarter of 2020 marked by the growth of new credit operations and the adoption of preventive measures…

Summary Asset Quality

…and a new reduction of the NPL ratio… 1Q2020:  Cost of credit risk (2): 0.07%  NPL: 4.5%  NPL Coverage by impairments: 84.3%  NPL net of impairments: 0.7%

Liquidity

…benefiting from a wide base of funding available...  Deposits: 88% of liabilities (3)  Pool of collateral: 18.3 B€  LCR: 392%  Loans-to-deposits: 71%

(1) Considering non-recurring costs of €55.9 million in Mar 2019 and €61.3 million in Mar 2020, relating to employee reduction programmes (2) In anticipation of the expected effects of the economic crisis, in the first quarter there was a reinforcement of credit impairments and provisions for bank guarantees of 60 M € (3) Excluding non-current liabilities held for sale

Business

Positive evolution of core operating income… 1Q2020 vs. 1Q2019:  Commissions: +4.1%

 Securities and Bancassurance: +22.1%;

 Recurrent operating costs: -4%  New mortgage loans PT: +13%  Balance of corporate loans CGD PT without CRE: +7.6% (+2.1% vs. December 2019)

Capital

…and maintaining a strong and adequate capital position. Capital ratios (fully loaded)  CET1: 16.6%  Tier 1: 17.8%  Total: 19.2%

1Q 2020 ROE = 4.5%

(1)

55

… allowing to face the impact of the crisis with adequate levels of capital, liquidity and efficiency

Summary

4.5%

Return on Equity (ROE) Recurrent Cost-to-Income NPL Ratio CET1 Fully loaded

49% 16.8% > 9% < 43% < 7% > 14%

(including Net Income)

2020 Strategic Plan Targets

(2)

European Banking Average

5.8% 64%

(3)

2020-03 Execution

14.8%

(excluding Net Income)

1.5%

(Net)

2.7%

(Imp. Cov. 44.7%)

0.7%

(Net)

4.5%

(Imp. Cov. 84.3%) (1) Current activity ROE = (net income + non-recurring costs + non-controlling interests) / Shareholders ' equity (average of 13 monthly observations and annualized); (2) Domestic activity; (3) EBA Risk Dashboard – December 2019;

16.4%

(excluding Net Inc)

16.6%

(including Net Inc.)

8.1% 47% 16.8%

2019-12 Execution

1.1%

(Net)

4.7%

(Imp. Cov. 77.4%)

16.9%

(including Net Income) (1)

56

16.9% 16.6% 13.5% 14.8% 11.9% 13.2% 14.9% 14.5% CGD 2019-12 CGD 2020-03 PT EU ES IT FR DE

Solvency: CGD with favourable performance within the European Union

Summary

CET 1 Ratio (fully loaded)

%

(1)

(1) Source: EBA Risk Dashboard – December 2019 Including Net Income Including Net Income

57

8.1% 4.5% 3.9% 5.8% 7.0% 5.6% 6.5%

• 0.2%

CGD 2019-12 CGD 2020-03 PT EU ES IT FR DE

47% 49% 59% 64% 53% 65% 71% 84%

CGD 2019-12 CGD 2020-03 PT EU ES IT FR DE

Efficiency and Profitability: CGD with favourable performance within the European Union

Summary

%

Cost to Income

(1)

Return on Equity (RoE)

(1) (2)

(1) Source: EBA Risk Dashboard – December 2019 (2) Excluding non-recurrent results

58

77.4% 84.3% 50.1% 44.7% 42.9% 53.7% 50.2% 39.0%

CGD 2019-12 CGD 2020-03 PT EU ES IT FR DE

4.7% 4.5% 6.5% 2.7% 3.2% 6.7% 2.5% 1.3%

CGD 2019-12 CGD 2020-03 PT EU ES IT FR DE

Asset Quality: CGD converging to European levels; coverage level exceeds standards

Summary

Coverage ratio of Non-Performing Loans

%

(1)

Non-Performing Loans ratio

(1)

(1) Source: EBA Risk Dashboard – December 2019

59

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